The Cap-and-trade program of the
Western Climate Initiative
ITU SYMPOSIUM ON ICTs
THE ENVIRONMENT AND
CLIMATE CHANGE
Montréal
29 May 2012
Robert Noël de Tilly
Senior Policy Advisor
Ministry for Sustainable
Development, Environment and Parks
Government of Québec
Canada
Presentation Outlook
1.
Quebec’s Climate Change Action
2.
The Western Climate Initiative Capand-Trade program
Evolution of GHG emissions in Quebec
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Evolution of GHG emissions by sectors
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Quebec Climate Action
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Climate Change Action Plan 2006-2012
Green Fund
Carbon Levy
Total Investment of 975 M$ in 5 years
2 000 green projects
500 more under analysis
Climate change Action Plan 2013-2020 in
preparation
Green Fund Projects
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Energy efficiency
Energy substitution and recuperation
Solar heating
Wind Farms
Cellulosic ethanol
Biogas
Biofuels
Electric cars
Public transportation
Green Projects in Québec
• Example of energy substitution project
In five years, 19 % reduction in GHG
emissions from College and University
buildings
• Wind farms in operation :
- 2000 : 1 farm and 100 MW
- 2011 : 11 farms and 1000 MW
- 2015 : 30 farms + and 4000 MW
John H. Dales
• Economist at University of Toronto
• Initiator of « Emissions trading » concept
• Author of : Pollution, Property and Prices
University of Toronto Press
1968
• Concept applied to Acid rain and Climate
Change Programs
EMISSION TRADING
• TWO MAJOR COMPONENTS
1. Cap : throuh regulation
2. Market : buyers and sellers exchange
allowances
• Kyoto Protocol encourages use of
emission trading
The Western Climate Initiative
• MAIN OBJECTIVE
Develop a cap-and-trade program to
reduce regional GHG emissions
• PARTNERS
California, British Columbia, Ontario, Manitoba,
Québec
The Western Climate Initiative
Program Scope
• 2012
– First Auction of allowances in November
• From 2013
– Electricity generation
– Industrial sector
– Threshold: 25,000 tonnes of CO2eq. per year
• From 2015
– fuel distribution (transportation and buildings)
– Threshold ; 25,000 tonnes of CO2eq. per year
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The Western Climate Initiative
Annual caps of GHG emission
allowances
• The annual caps will be
established by decree, in
the fall of 2011, for 20132020
• Mitigation goal : 20%
below 1990 levels by
2020
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The Western Climate Initiative
Compliance obligation
Surrender of a number of allowances that
equals total verified emissions reported during
a compliance period
Three compliance periods :
– First period : 2013 to 2014
– Second period : 2015 to 2017
– Third period : 2018 to 2020
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The Western Climate Initiative
Compliance obligation
• On October 1st following the end of each compliance period (2015, 2018,
2021)
– the compliance account must contain a number of allowances that equals the
total amount of GHG emissions reported and verified during the compliance
period
– the use of offsets credits is limited to 8 % of compliance obligation
– penalty of 3 to 1 and financial penalty for non-compliance
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The Western Climate Initiative
Flexibility Mechanisms and
Other features
• Banking is allowed / Borrowing is not allowed
• Contingency/Strategic Reserve
• Early Reduction Allowances (2008-2011)
• Electronic transactions / secured registry
• Holding limits / market monitoring to prevent manipulation
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The Western Climate Initiative
Offsets credits
• Priority sectors for the development of protocols
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Agriculture
Forestry
Waste management
• Other sectors to be announced
– Offsets credits program
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Use : limited to 8 % of the compliance obligation
GHG Reductions or sequestration from sectors or activities not covered by the program
Within WCI, Canada, United States, Mexico
Other countries - to be determined
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Information
WCI
www.westernclimateinitiative.org
www.wci-inc.org
MDDEP
Robert Noël de Tilly
Ministère du Développement durable, de l’Environnement et des Parcs
Québec, Canada
robert.noeldetilly@mddep.gouv.qc.ca